How Firms' Ownership Structure Impacts Online Peer-to-Peer Lending Performance in China

A dramatic surge in online peer-to-peer (P2P) lending emerged in China, where (under conditions of credit deficiency) it took only three years for the size of the P2P lending market in China to reach four times that of the United States and ten times that of the United Kingdom. The literature indicates that ownership structure is an important factor that influences P2P lending firms' performance, while research on the underlying mechanisms remain insufficient. This study analyzes the data of P2P lending companies between June 2016 and March 2017. The results demonstrate that although ownership structure has minimal direct effect on the turnover volume and number of lenders and borrowers, it moderates the effects of firm age, interest rate, and loan term on firm performance. These results enrich the property theory and shed light on how P2P lending firms with different ownership structures could succeed when there is institutional deficiency.